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ICOs made almost $13 billion in profits from their token sales despite the 2018 cryptocurrency bear market, new research from BitMEX reveals.

BitMEX: ICO Issuers ‘Gave Themselves $24 Billion’

Published January 16, the third instalment of the trading platform’s dedicated series on ICO statistics also suggests ICO teams “gave to themselves” tokens worth over $24 billion at the time of issuance.

“Today this figure has fallen to around US$5 billion, with the difference primarily being caused by a fall in the market value of the tokens, alongside ($1.5 billion) of transfers away from team address clusters (Possibly disposals),” BitMEX summarizes.

In total, combined with findings from the second installment in October 2018, a figure of $12.8 billion is now circulating as the total profit wrought from the ICO craze of the past two years.

While some teams have since launched products and demonstrated application of funds, many have yet to do so, staying dormant since their token sales.

As Bitcoinistreported, ICOs that raised hundreds of millions of dollars each faced a highly volatile market over the last twelve months with over 70 percent now underwater.

Others have since fallen foul of the law, with Paragon and Airfox both required to pay back huge sums to investors along with fines for flouting US securities regulations.

2020 ICO Renaissance?

Responding to the BitMEX findings, Blockstream CEO and Hashcash inventor Adam Back thus appeared unsurprised.

“[W]hen people start startups, they take usually a paycut (versus a) big (company), so modest pay, relatively,” he commented on Twitter.

[A]and take illiquid stock, that is not tradeable (sic) until they achieve technology and market success. [A]m I reading it right that ICOs just dipped into investor capital (and) gave it to themselves?

when people start startups, they take usually a paycut vs big co, so modest pay, relatively. and take illiquid stock, that is not tradeable until they achieve technology and market success. am I reading it right that ICOs just dipped into investor capital & gave it to themselves?

After the sharp decline for Bitcoin price yesterday retesting the low $3,500s we take a closer look at whats going on with the market.

Bitcoin Price: 4-Hour Bitcoin Chart

Bitcoin price 00 has failed to regain the critical $3750 point of control so far this week and is still consolidating under it after being rejected by the $4k handle and scuppering the short term hopes of an inverse head and shoulders bottom.

Last night saw the price fall from highs of $3680 and a subsequent bounce back today, before once again being rejected and settle around $3600, but seemingly continues to be drawn towards the mid $3000s rather than pressing on to new highs.

Sentiment Analysis

Looking more closely at the market we can see that the sentiment in the market is bullish, with longs out weighing shorts by 30k to 22k at Bitfinex.

While this may suggest that the market believes that there is hope that the bottom is in and upside can be expected, the issue is that generally speaking, the longs at 30k is reaching the maximum levels the market tends to see, with these positions being built all the way down to $6k.

During this time, short positions have also closed from 40k down to 22k.

This means that despite the buying pressure of both combined, the market remains stuck around the mid $3ks, which is the 61% retracement of the bounce from $3.1k.

Looking at the total leverage exposure, this is also beginging to reach out towards the 50k lows that we have previously seen. As highlighted on the chart, it becomes clear that where we have seen these conditions in the past, we have seen a sharp selloff to retest the lows.

Bitcoin is therefore starting to reveal some underlying weakness in its market posture and indicates that another retest of the low $3ks could be on the horizon in the near future.

With CBOE XBT futures expiring today, there may be some hope of a short term relief rally as we have seen previously but generally speaking it seems likely that Bitcoin price needs to prove its metal at the $3.1ks before we move higher.

[Disclaimer: The views expressed in this article are the personal opinion of the author and do not reflect the views of Bitcoinist. The information in the article should not be taken as financial advice.]

A rather interesting listing has popped up in The Times of parents seeking to raise money for their newborn baby via Bitcoin donations.

‘Bitcoin Baby’ Asks for College Donations

Little Izabella Anna Bowles was born on January 6th, 2019. Her parents, however, have decided to waste absolutely no time in saving up for her college fund.

Unlike regular parents, however, Wioletta and Peter, have decided to ask the cryptocurrency community for their financial support.

A listing published in The Times reads:

Bitcoin Baby

On 6th January 2019 to Wioletta (nee Witek) and Peter, a daughter, Izabella Anna Bowles, sister to Philip, Weighed 2.2kg.

Bitcoin College fund: 1ZAB5XeKMdvax2S8eZT7GQ6Nj4xjbsw1Y

The cryptocurrency community has been quick to respond. The first recorded transaction to that address was on January 10th. Four days later, the address has already seen 154 transactions and it contains 1.03581043 Bitcoin (BTC) 00.

At the time of writing this, the BTC in the address is worth around $3,660.53.

The Times is no stranger to publishing Bitcoin-related content. On January 3rd, 2019, the newspaper featured a front cover ad celebrating Bitcoin genesis block’s tenth birthday, which famously includes a headline from The Times on January 3rd, 2009 that reads:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

The same issue also published an article of BitMEX’s CEO Arthur Hayes warning that the end of cash is “sooner than you think.”

Begging or Crowdfunding?

Izabella’s parents initiative has been regarded by some as a “disguised way to beg” as the Reddit submission has been flagged and removed as it constitutes “begging for money.”

However, the overwhelming majority of users have been nothing but welcoming. The accumulated amount of BTC best shows that.

One thing most of them seem to agree on, however, is the fact that it was a bad move by the parents to only publish the 33 alphanumeric address instead of the alternative QR code.

A lot of users are also making the case that while the current amount of Izabella’s college fund might be insufficient to cover her tuitions if the bullish predictions for Bitcoin’s price come true, it might be more than enough in the future.

XRP has reclaimed the position of the second largest cryptocurrency by market cap from ETH just days before Ethereum’s ‘Constantinople’ hard-fork upgrade.

Pre-Fork Drop

On January 16th, Ethereum is scheduled to undergo a network-wide system update called ‘Constantinople’. Among other things, the implementation of the upgrade will reduce the block reward from 3 ETH/block to 2 ETH/block.

Days before the event, however, Ethereum’s (ETH) 00 price experienced a notable decline.

In a matter of minutes, ETH price dropped by about 8 percent.

The movement caused ETH to fall behind Ripple (XRP), which reclaimed its spot as the second largest cryptocurrency by means of market capitalization, less than two weeks after Ethereum regained the number two spot from XRP.

In fact, the two have been neck and neck over the pastfew months in cryptocurrency market cap rankings.

XRP 00 also experienced a decrease around the same time, but the cryptocurrency experienced a relatively smaller loss of 2.5 percent against the USD.

Ethereum’s ‘Constantinople’

Constantinople is a system upgrade scheduled for implementation at block 7,080,000. Given the current average block time, the event should take place on January 16th, 2019.

One of the most discussed changes that the upgrade will cause is the reduction of block reward from the current 3 ETH/block to 2 ETH/block. This is also referred to as the “thirdening.” It’s the second time Ethereum’s block rewards have been reduced.

The first one was called “Byzantium” and it took place on October 16th, 2017. Back then, ETH surged by about 6 percent during the day, followed by the cryptocurrency’s late 2017 rally to an all-time high of about $1,400.

Fresh from completing its maiden funding round, Bakkt announced its first acquisition on Monday, Jan. 14, 2019. The daughter company of the Intercontinental Exchange (ICE) is also eyeing the possibility of expanding beyond the U.S. market.

Bakkt Acquires RCG Back Office

Bakkt announced the news of the acquisition via a Medium post by CEO, Kelly Loeffler. According to the blog post, the company is acquiring some assets of Rosenthal Collins Group (RCG), a longstanding independent futures commission merchant.

We're pleased to share that we have entered into an agreement to acquire certain assets of Rosenthal Collins Group (RCG), an independent futures commission merchant https://t.co/5sgdbRO6Ql

According to Loeffler, the deal should be finalized by February. Back in December 2018, Marex Spectron, the Commodity Brokerage firm acquired RCG’s customer business. The Bakkt CEO says the deal with RCG is for the purchase of assets related to its platform.

Typically when companies are combined you have overlapping systems, so we saw an opportunity to a purchase a portion of the back office operations, including compliance and treasury services, and risk management, as well as adding members of the RCG team.

Commenting on the importance of the acquisition, Loeffler said that it enhanced the platforms expertise across risk management and treasury operations.

Other aspects of the transaction will contribute to our regulatory, AML/KYC and customer service operations as we help enable digital asset acceptance by bringing more choice and control to buyers and sellers.

To this end, Loeffler insists that the acquisition isn’t tailored to institutional needs alone. According to the Bakkt CEO, the move has immense benefits for its consumer business as well.

Not Standing Still

The United States Commodity Futures Trading Commission (CFTC) is yet to approve for Bakkt to begin trading its Bitcoin futures. However, Loeffler says the company isn’t waiting around for approval as the team continues to work behind the scene.

Initially set for launch in January 2019, reports say the current U.S. government shutdown will push the launch to ‘early 2019.’

Nevertheless, Bitcoinist reported that the company raised $182.5 million in its first funding round from prominent investors like Microsoft at the end of December.

While waiting for CFTC approval, Bakkt is reportedly eyeing making inroads to markets outside the United States. According to Loeffler, the platform is in talks with regulatory agencies outside the country.

Meanwhile, the company continues to reiterate that the current market conditions do not negatively impact its plans. Loeffler noted:

People focus narrowly on Bitcoin’s price, but blockchain and crypto-currency technology keep advancing. Bitcoin certainly needs a boost; Bakkt could very well help provide it.

Do you think the Bakkt launch will ignite Bitcoin boost? Let us know your thoughts in the comments below.

Russian economist, Vladislav Ginko, says Russia is looking to invest $10 billion in Bitcoin as the State Duma has put cryptocurrency legislation high on the agenda for 2019.

Rumored $10 Billion Bitcoin Investment

Ginko, an economist with ties to the Kremlin, says the Russian government will convert some of its USD reserves into Bitcoin, a move that could start as early as February.

Last week, Bitcoinist first reported on the government’s rumored plans to ditch the Dollar as a way of circumventing U.S. sanctions.

Vladislav Ginko

Now, according to The Telegraph, the Kremlin plans to invest as much as $10 billion into Bitcoin, citing Ginko, who added:

[The] Russian government is about to make a step to start diversifying financial reserves into Bitcoin since Russia [is] forced by US sanctions to dump US Treasury bonds and [take] back US dollars.

“These sanctions and the will to adopt modern financial technologies lead Russia to the way of investing its reserves into Bitcoin.

The economist also believes cryptocurrency-related activity now comprises as much as 8 percent of the country’s GDP. What’s more, Ginko expects Russia to also create an intermediary ‘Bitruble,’ which it will trade for bitcoin.

“The proposal that I understand is on the desk of the finance minister at the moment is to create some sort of intermediary cryptocurrency,” commented Mati Greenspan, Senior Market Analyst at eToro, in reaction to the news.

We know that Vladimir Putin is a big advocate of blockchain technology. Obviously he doesn’t like the sanctions that have been placed on him, and he’s already said that these types of sanctions are going to lead to de-dollarization. This is more or less the direction the Russian government is going.

Cryptocurrency Regulations High on the Agenda

Greenspan also adds that “the only thing holding the country back is the legal framework to do so.”

Interestingly, fuelling the aforementioned rumors are new reports that Russian lawmakers are looking to prioritize creating a legal foundation for the cryptocurrency market this year.

According to Alexander Zhukov, the First Deputy Chairman of the State Duma, cryptocurrency regulations are a primary focus of legislative work for 2019. An excerpt from a recent article on the official State Duma website reads:

Among the priorities of parliamentary work in the spring session are issues of the development of the digital economy, bills aimed at improving the anti-corruption legislation, as well as amendments that will strengthen the fight against financial scammers.

Apart from being one of the focus points for the Spring Session of the State Duma, matters relating to the cryptocurrency industry will also receive special attention.

According to Zhukov, the Chairman of the State Duma, Vyacheslav Volodin has mandated that special attention is paid to draft laws towards the development of the digital economy.

Russia’s Cryptocurrency Law May Finally Happen in 2019

Despite several efforts, the country’s legislature was unable to pass any cryptocurrency legislation in 2018. Even with the apparent urging of President Vladimir Putin, the State Duma didn’t pass the “On Digital Financial Assets” bill.

With these new declarations from high-ranking members of the Russian Parliament, the country might finally be on the path of obtaining clear-cut regulations for the industry. Speaking during the opening plenary meeting, Volodin urged lawmakers to push beyond “legislative blockages” and focus on passing and enforcing laws.

What impact do you think a $10 billion investment by Russia would have on the price of Bitcoin? Let us know your thoughts in the comments below.

Swiss private bank Vontobel is planning to offer custody services for cryptocurrencies in a move executives described as a worldwide “first.”

Vontobel To Create ‘Digital Asset Vault’

In an interview with local finance magazine Finews.ch, Vontobel, which has offered cryptocurrency-related investment products since 2016, said it now wanted to increase its integration.

“As far as I know, Vontobel is the only bank globally to offer itself as a custodian for digital assets,” investment banking head Roger Studer told the publication.

Switzerland continues to position itself as a leader in banking attitudes to cryptocurrency, with multiple entities seeking to open up the market to institutional and private investors.

However, Vontobel, Studer says, will be the first bank-sponsored custody solution to market, not just in Switzerland but in the world.

“…We decided two years ago to make the new crypto investment world available to our clients,” he continued. “Our custody offering is a further step in this direction.”

Legacy Finance Sidles Up To Crypto Assets

The move will come via a partnership with Geneva-based startup Taurus, which specializes in crypto custody and storage. Vontobel will ultimately operate what it calls a “Digital Asset Vault,” a label synonymous with the physical bunker currently operated in Switzerland by Xapo.

“The cooperation between Taurus and Vontobel is of high importance for the Swiss financial market because we are linking up two worlds: traditional banking and crypto finance,” Taurus co-founder Lamine Brahimi continued to Finews.

As Bitcoinist reported, 2018 already saw more direct support for Bitcoin specifically from Swiss financial sources.

IT consulting firm Inacta AG, one resident of the country’s Crypto Valley community in the city of Zug, became one of the first users of Blockstream’s Liquid sidechain in December.

What do you think about Vontobel’s cryptocurrency custody plans? Let us know in the comments below!

Where better to check out all the latest crypto-tech than the Consumer Electronics Show in Las Vegas. Actually, as it turned out, finding crypto at CES wasn’t as easy as first expected.

Technology Unveiled at CES 2019

The Sunday before the show hosts a media event called CES Unveiled, featuring the Best of Innovation awards.

After three hours feigning interested in a whole range of tech startups latest offerings, I was beginning to lose hope. The closest I’d come to anything blockchain related was a point-of-sale device, which the exhibitor said: “could develop to include cryptocurrency payments in the future.”

Just as the event was finishing I stumbled across the Archos booth, where they were showing a new hardware wallet, the Safe-T touch. I arranged to meet them again during the show proper, with the possibility that they might be able to source a review model.

On exiting the hall I was sequestered by a youth holding a sign saying CoinAgenda. Apparently there was a crypto-afterparty a short bus ride away. A quick straw poll of the guests suggested that nobody really knew what the party had to do with crypto. But there was an open bar, so nobody seemed overly concerned.

Conference Tracks

Monday was spent exploring Vegas, but I did chance upon this Bitcoin ATM in a Love Boutique.

Then Tuesday saw a full day of hosted panel-type discussions in the ‘Digital Money’ conference track. Access to these conference tracks required the purchase of an additional pass over and above the registration for the main event. Whilst I hadn’t found much to report from the Unveiled show, there was a rich vein of cryptocurrency and blockchain, playing a prominent part in events.

A diverse range of speakers and panel guests included Brock Pierce, Tim Draper, Michael Terpin of Transform group, and the Prince of the Netherlands. Sessions covered topics such as security, blockchain in the entertainment industry, regulation, and decentralization.

Last on the schedule was ‘The Second Annual Token Slugfest’, in which six companies gave four-minute pitches for their ICOs. This concluded with a clap-o-meter type judging of the pitches, and the crowning of an eventual winner.

Having spent the day bathed in the warm fuzzy glow of all things crypto, my spirits were rejuvenated. I planned to hit the show floor the next day to continue my search. Actually the (many) show floors. I hadn’t realized quite how big this CES thing was.

@marabrito31 & I just found the @pascalboyart’s mural painting puzzle in Paris. We are very happy to win this race. We thank PBoy, @alistairmilne, and every people involved in this artwork for their creativity.

‘Spread Bitcoin’

The exact solution to the puzzle is yet to be revealed.

“We’ll post the story and details of our finding in the following days. Spread Bitcoin!” writes Antoine.

The only thing that the user has shared is that they “think this painting clearly exposes the fight of French citizens who were always united during History to triumph over bankers lies.”

The mural itself does have a revolutionary note to it, depicting a woman waving the French flag in what seems a call to fight, backed by men in yellow vests.

The yellow vest movement in France started in November 2018 after the country’s government decided to raise fuel prices. Thousands of people marched to the streets and a large number of them were wearing yellow vests. Bitcoinist reported that the group is planning a bank run to collapse the Euro.

What do you think about the street mural in Paris and the Bitcoin puzzle in it? Don’t hesitate to let us know in the comments below!

The Office of Compliance Inspections and Examinations (OCIE) of the United States Securities and Exchange Commission (SEC) listed the cryptocurrency market as one of the six focus points of its compliance monitoring activities for 2019.

Spotlight on the Cryptocurrency Market

According to a report titled “2019 Examination Priorities,” OCIE says it plans to shine the spotlight on the goings-on in the cryptocurrency. An excerpt from the report relating to cryptocurrencies reads:

Given the significant growth and risks presented in this [the crypto] market, OCIE will continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance. In particular, through high-level inquiries, OCIE will take steps to identify market participants offering, selling, trading, and managing these products or considering or actively seeking to offer these products and then assess the extent of their activities.

To this end, the OCIE plans to examine the activities of firms operating in the digital asset market. This examination will cover sale, trading, as well as the management of cryptocurrency assets. The OCIE also plans to pay particular attention to cryptos deemed to be securities.

Commenting on the approach for 2019, Pete Driscoll, Director of the OCIE, said:

OCIE is steadfast in its commitment to protect investors, ensure market integrity and support responsible capital formation through risk-focused strategies that improve compliance, prevent fraud, monitor risk, and inform policy.

Identifying the virtual currency market as a priority isn’t a new development for the OCIE. Back in 2018, the emerging market also formed part of the OCIE’s agenda. However, the mandate for 2019 appears to be an extension of the goal for last year, which focused primarily on risk and security.

Too Much Regulation?

The expansion of OCIE’s focus on digital assets comes at a time when U.S. Federal Lawmakers are trying to establish a separate regulatory ambit for cryptocurrencies. Some commentators feel the SEC is over-regulating the industry, slowing the rate of innovation in the country with regard to digital assets.

In December 2018, Reutersreported that members of the GOP were frustrated with the leadership of the SEC over their stance on most ICOs being securities. This new report from the OCIE expanding its examination focus might exacerbate such concerns. Meanwhile, for the SEC, the Commission continues to state that strict laws create a safer marketplace.

What do you think about the SEC’s focus on cryptocurrency in 2019? Let us know your thoughts in the comments below!